Financial Reports & Disclosure Obligations (SICAR) - #268-257*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) shall draw up a prospectus. An annual report (for each financial year) shall also be produced. But a semi-annual report is not necessary.

Key information documents (“KID”) for packaged retail and insurance-based investment products (“PRIIPs”) are also required if retail investors can make investments. 

References: Article 23(1) of the amended law of 15 June 2004 relating to SICAR; Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on KID for PRIIPs; Authorisation and Supervision (SICAR), September 14, 2020, Bertrand Mariaux.

*Podcast #268:

Financial Reports & Disclosure Obligations #268-257* *Article #268-257 *Podcast #268 *YouTube Video 257| #ImpactInvesting , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance , #domiciliation , #SICAR Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 257|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Authorisation and Supervision (SICAR) - #267-256*

The investment company in risk capital (“SICAR”) must be authorised by the financial regulator (the Commission de Surveillance du Secteur Financier (“CSSF”)). A SICAR is supervised by the CSSF on an ongoing basis and is subject to regular reporting requirements. A SICAR shall be authorised only if the CSSF has approved its constitutional documents and the choice of the depositary. The amendments of the constitutional documents of the SICAR are subject to the approval by the CSSF. The CSSF levies a fee for the authorisation and supervision and keeps an official list of authorised SICARs. The list is published.

References: Articles 11(1), 12(1), (2), (4) & 13(1) of the amended law of 15 June 2004 relating to SICAR; Grand-ducal Regulation of 21 December 2017 relating to the fees to be levied by the Commission de Surveillance du Secteur Financier.

*Podcast #267:

Authorisation and Supervision (SICAR) #267-256* *Article #267-256 *YouTube Video 256| . . . . . . . . #ImpactInvesting , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance , #domiciliation Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 256|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

What is the legal form of a SICAR? - #266-255*

The investment company in risk capital (“SICAR”) may not be created in the form of a contract. The SICAR must be set up in the form of a corporate entity. Instruments of incorporation are required. The SICAR could have a fixed or a variable capital. Single fund or umbrella set-up (with multiple compartments) is possible. 

In the case of an umbrella fund, each compartment represents a distinct part of the SICAR’s assets and liabilities. The fund and the compartments are not limited as regards the number of classes of shares. This can then be tailored on investors’ needs or based on to whom the fund is distributed.

References: Articles 1(1) §1 and 3(2) of the amended law of 15 June 2004 relating to SICAR; Legal Framework (SICAR), September 11, 2020, Bertrand Mariaux.

*Podcast #266:

What is the legal form of a SICAR? #266-255* *Article #266-255 *YouTube Video 255| Any content published on MariauxAvocats.com does not constitute legal advice. Its sole purpose is to provide general information at the date of publication. Whenever necessary, it is preferable to seek advice from a licensed lawyer.

*YouTube Video 255|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Legal Framework (SICAR) - #265-254*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) is primarily governed by the amended law of 15 June 2004 relating to SICAR (the “SICAR Law”). The SICAR Law was amended by the Law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”). 

Indeed, there are two parts in the SICAR Law: 

• Part I refers to the general provisions applicable to all SICARs;

• Part II concerns the specific provisions applicable to SICARs qualifying as alternative investment funds (“AIFs”). AIFs are defined by the AIFM Law. AIFs must be managed by an alternative fund manager (“AIFM”). Most SICARs qualify as AIFs.

Another piece of legislation must be applied especially if SICARs invest in short-term assets or have distinct objectives offering returns in accordance with money market rates or where SICARs intend to preserve the value of the investment. The SICAR must then comply with the EU Regulation 2017/1131 on money market funds.

SICARs shall also comply with other pieces of legislation, at national and EU level (on anti money laundering, the amended markets in financial instruments Directive (The “MIFID II”), market abuse, derivatives, securities and general corporate law...).

References: Articles 1(39) and 4(1) of the AIFM Law; the EU Regulation 2017/1131 on money market funds; Determination of the AIFM, August 27, 2020, Bertrand Mariaux.

*Podcast #265:

Legal Framework (SICAR) #265-254* *Article #265-254 *YouTube Video 254| Any content published on MariauxAvocats.com does not constitute legal advice. Its sole purpose is to provide general information at the date of publication. Whenever necessary, it is preferable to seek advice from a licensed lawyer.

*YouTube Video 254|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Eligible Assets (SICAR) - #264-253*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) must invest its assets in securities representing risk capital. 

The amended law of 15 June 2004 relating to SICAR (the “SICAR Law”) defines investment in risk capital.

Investment in risk capital is the (i) direct or indirect contribution of assets to (ii) entities; 

in view of their,

• launch;

• development; or 

• listing on a stock exchange.

References: Article 1(1) & (2) of the SICAR Law; Eligible Investors (SICAR), Septembre 8, 2020, Bertrand Mariaux.

*Podcast #264:

Eligible Assets (SICAR) #264-253* *Article #264-253 *YouTube Video 253| . . . . . . . .

*YouTube Video 253|: 

Eligible Assets (SICAR) #264-253* *Article #264-253 *Podcast #264 *YouTube Video 253|

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Eligible Investors (SICAR) - #263-252*

Investment in an investment company in risk capital (société d'investissement en capital à risque - “SICAR”) is reserved to “well-informed” investors. 

The amended law of 15 June 2004 relating to SICAR (the “SICAR Law”) defines well informed investors as: 

• institutional investors;

• professional investors; or

• any investor who meets the following conditions:

1. the investor has confirmed in writing that he adheres to the status of well-informed investor; and

2. the investor invests a minimum of 125,000€ in the SICAR, or

3. the investor has been assessed by: 

   • a credit institution;

   • an investment firm; or

   • a management company, which certifies his expertise, his experience and his knowledge in adequately appraising an investment in risk capital.

References: Article 2 §1 of the SICAR Law; Investment Company in Risk Capital (SICAR) - Introduction, September 7, 2020, Bertrand Mariaux.

*Podcast #263:

Eligible Investors (SICAR) - #263-252* *Article #263-252 *YouTube Video 252| . . . . . . . .

*YouTube Video 252|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Investment Company in Risk Capital (SICAR) - Introduction - #262-251*

An investment company in risk capital (société d'investissement en capital à risque - “SICAR”) is a financial vehicle tailored for private equity and venture capital investments. It may qualify as an alternative investment fund (“AIF”). Securities or partnership interests of the SICAR are reserved to well-informed investors. SICARs that have appointed a European alternative investment fund manager (“AIFM”) can market their securities or partnership interests to investors across Europe via a specific passport. 

References: Articles 1(1) & (2) of the amended law of 15 June 2004 relating to SICAR (the “SICAR Law”); for specific provisions applicable to SICARs managed by an alternative investment fund manager, see: Part II – Specific provisions applicable to SICARs managed by an AIFM authorised under Chapter 2 of the law of 12 July 2013 on alternative investment fund managers or under Chapter II of Directive 2011/61/EU of the SICAR Law; for the definition of well informed investors, see Article 2 §1 of the SICAR Law.

*Podcast #262:

Investment Company in Risk Capital (SICAR) - Introduction - #262-251* *Article #262-251 *YouTube Video 251| . . . . . . . .

*YouTube Video 251|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Administration, Safekeeping & Servicing (RAIF) - #261-250*

The central administration of a reserved alternative investment fund (“RAIF”) must be located in Luxembourg. A central administration agent may be appointed to act as a domiciliary agent, registrar and transfer agent. This agent may then keep the accounts and calculate the net asset value. A RAIF is then not required to have employees in its own premises. Other typical service providers include lawyers, portfolio managers, investment advisers, distributors, paying agents. 

Safekeeping

The assets of a RAIF must be entrusted to a depositary for safe-keeping of assets. The depositary must either have its registered office in Luxembourg or have a branch there if its registered office is in another Member State of the European Union. The depositary must be a credit institution or an investment firm. the depositary may also be an entity governed by Luxembourg law which has the status of a professional depositary of assets other than financial instruments. 

Auditing

RAIFs must have the accounting information given in their annual report audited by a licenced independent auditor (réviseur d’entreprises agréé).

References: Articles 1(1)§1, 5(1), 5(2), 5(3)§1, §2 and 43(1) §1 of the amended law of 23 July 2016 on RAIFs;  Financial Reporting & Disclosure Obligations (RAIF), September 4, 2020, Bertrand Mariaux.

*Podcast #261:

Administration, Safekeeping & Servicing (RAIF) #261-250* *Article #261-250 *Podcast #261 *YouTube Video 250| . . . . . . . .

*YouTube Video 250|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

European Passport (RAIF) - #259-248*

Reserved alternative investment funds (“RAIF”) must qualify as alternative investment funds (“AIF”) under the Law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”). 

Under applicable provisions every RAIF must be managed by an alternative investment fund manager (“AIFM”).

A RAIF may then benefit from the European passport. The RAIF’s AIFM may market the RAIF’s securities or partnership interests to professional investors within the EU through a regulator-to-regulator notification regime. 

References: Articles 1(1)a, 4(1) and 50 of the amended law of 23 July 2016 on RAIFs; Directive 2011/61/EU of 8 June 2011 on AIFM; AIFM and RAIF - i, August 25, 2020, Bertrand Mariaux.

*Podcast #259:

*YouTube Video 248|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Financial Reporting & Disclosure Obligations (RAIF) - #258-247*

A reserved alternative investment fund (“RAIF”) and its management company must establish an offering document or a prospectus. An annual report (for each financial year) must also be produced. A semi-annual report is not necessary.

Key information documents (“KID”) for packaged retail and insurance-based investment products (“PRIIPs”) must also be produced if retail investors can make investments. 

References: Article 38(1) and (3) of the amended law of 23 July 2016 on RAIFs; Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on KID for PRIIPs; Creation & Indirect Supervision - (RAIF), September 3, Bertrand Mariaux.

*Podcast #258:

*YouTube Video 247|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)